Egypt's industrial sector sees significant growth

On the bank's of the Nile. Egypt's transport sector is set for a boost with multimodal and trans-shipment capacity. (Photo: by Shutterstock)

The Egyptian industrial sector made significant achievements in 2022. Exports reached USD 27 billion in nine months and are expected to reach USD 33 billion by the end of 2023. The industrial sector contributes 11.7 per cent to GDP and absorbs 28.2 per cent of the total workforce. Ahmed Abdel-Rahman explains.

Since the industrial sector, contributes 11.7 per cent to Egypt's gross domestic product (GDP) the government supports it a great deal. The industrial sector is one of the main pillars of the national economy and the locomotive of economic development. This is in addition to the sector's helping to achieve social stability, provide job opportunities for young people and improve the living standards of citizens.

The industrial sector absorbed 28.2 per cent of the total Egyptian workforce and represents about 6 per cent of the total public investments. Its investments amounted to about EGP 49 billion (USD 1.6 billion) during the fiscal year 2020/2021. The value of industrial output also increased to about EGP 982 billion in 2021, in addition to Egypt enjoying a diversified industrial base that includes about 150 industrial zones distributed in all governorates of Egypt. The textile industry, home furnishings, cement industry, and copper products are the most important sectors of this industrial base.

Thanks to the directives of President Abdel Fattah El-Sisi, the industrial sector has witnessed significant growth over the past few years. For example, the measures taken by the government in 2022 contributed to achieving positive growth in Egyptian foreign trade, measured by increasing exports, declining imports, and improving the trade imbalance, including pushing Egyptian exports to an historic high.

With the government spending a total of USD 32.4 billion in this sector, it achieved a 46 per cent increase in exports during 2021. Exports in the first nine months of 2022 value exceeded USD 27 billion, amid expectations that total industrial and commodity exports will reach more than USD 33 billion by the end of 2023.

The government's policies have promoted comprehensive and sustainable economic development, which has been based mainly on the advancement of the national industry through the provision of industrial lands, the establishment of cities and specialised industrial complexes, the establishment of a network of roads covering all parts of the country and supporting the logistical transport system. Soft financing programmes for all productive projects are also available. Among the most important projects are those that focus on traditional, and handicraft products in cooperation with the World Food Organization (WFO). Egypt dominates the industrial sector in the region, as it has raw materials and traditional and renewable energy sources.

To advance the Egyptian industry and attract investors for various industrial sectors, such as textiles and cement sectors, to meet the needs of the local market as well as increase Egyptian exports to global markets, 17 industrial complexes ) have been established in 15 governorates nationwide, at a total investment cost of about EGP 10 billion. Over the past two years, the government succeeded in building seven industrial zones with a total number of units amounting to 1,657 units in the governorates of Alexandria, the Red Sea, Gharbia, Beni Suef, Minya, Sohag and Luxor. Approvals and licenses have also been granted for the establishment of new factories, expansions and the upgrading of existing factories in light of the new industrial licensing law. The approvals included all governorates of the country in a number of activities, including engineering, electronic, electrical, food, beverage, building materials, ceramics, refractories, spinning, weaving, clothing, leather, manufacturing industries, and chemicals.

A total of 82,152 industrial establishments provide four million job opportunities.

Industry incentive measures

Industry incentive measures include providing standard costs of the Industrial Development Authority's services and reducing costs by 75 per cent for small industries projects and by 50 per cent for medium industries' projects. These procedures also include an exemption from the value of costs within the industrial zones, and exemption of small industries by 90 per cent and medium industries by 80 per cent of the value of the costs of determining the actual productive capacity for projects.

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Sunday, 26 March 2023